ABSTRACT
As discussed in Chapter 1 and in much more detail in Appendix A, the perspective of neoclassical economics on natural resource scarcity, allocation and measurement is based on a number of distinguishing postulates:
1 Nothing rivals the market as a medium for resource allocation. 2 Resource valuation depends only on individual ‘preferences’ and initial endow-
ments as determinants of prices. 3 For privately owned resources, market prices are ‘true’ measures of resource
scarcity. 4 Price distortions arising from externalities can be effectively remedied through
appropriate institutional adjustments (see Chapter 3). 5 Resource scarcity can be continually augmented by technological means. 6 Human-made capital (such as machines, buildings, roads, etc.) and natural capital
(such as forests, coal deposits, wetland preserves, wilderness, etc.) are substitutes.
